FamilyMart Sees 10% Annual Profit Growth From 2016

A man walks out of a FamilyMart Co. convenience store in Shanghai, China. The store operator has opened more outlets abroad than in Japan as a shrinking population at home reduces demand. Photographer: Qilai Shen/Bloomberg

Dec. 18 (Bloomberg) -- FamilyMart Co., Japan’s third-biggest convenience store chain, expects net income to rise to
30 billion yen ($357 million) by 2016 and grow about 10 percent
annually in following years as it ramps up overseas operations.

International divisions will double their earnings
contribution to 20 percent by February 2016 from about 10
percent now as more overseas units become profitable, Chief
Financial Officer Yoshiki Miyamoto said in a Dec. 14 interview.
The Tokyo-based company had net income of 16.6 billion yen in
the 12 months ended February.

The store operator has opened more outlets abroad than in
Japan as a shrinking population at home reduces demand.
FamilyMart has 9,201 stores in Japan and 12,549 overseas as of
November and plans to almost double its shop network to 40,000
globally in 2021, according to the company website.

“There is a big impact when an unprofitable business turns
profitable,” Miyamoto said. Thailand is now in profit, while
China may make money next year, he said.

The retailer expects net income to increase more than 10
percent annually on average until the year ending February 2016,
said Tomoaki Ikeda, the company spokesman. The earnings outlook
excludes one-time items.

FamilyMart businesses in Taiwan, Thailand and South Korea
posted earnings of 2.4 billion yen last year, according to the
company’s annual report. Units classified as “other areas,”
which includes the U.S., Vietnam and China, lost 932 million
yen, according to the report.

The Thai business, which turned profitable in 2010, is
speeding up expansion in the Southeast Asia country through a
tie-up with a local company.

FamilyMart is considering entering the Russia market and
open at least 300 to 500 stores, Miyamoto said, without
specifying when the company plans to operate in the country.

The company operates in eight countries as of November, and
it plans to open stores in the Philippines in February next
year, it has said. Its larger competitor Seven & I Holdings Co.,
operator of the 7-Eleven chain, has stores in 16 countries,
while Lawson Inc. operates in four countries.